Economics fiscal and monetary policy

Which of the following statements is true?

• Contractionary monetary policy would increase government revenue & slow down the economy.

• Contractionary fiscal policy would decrease the money supply (supply of money) & slow down the economy.

• Contractionary fiscal policy would lead to a decrease in national debt.

• Contractionary monetary policy leads to a budget deficit.

Which policy tool would be used if the economy were in a trough?

• increase the interest rate

• increase the tax rate

• decrease the money supply

• increase government spending

Which of the following would cause a budget deficit?

• government spending > government revenue in all of the past years

• government spending < government revenue in all of the past years

• government spending < government revenue in any given year

• government spending > government revenue in any given year

• none of the year

Which monetary policy tool would speed up the economy?

• increasing money supply

• decreasing income taxes

• increasing government spending

• decreasing money supply

Which combination of fiscal and monetary policy would speed up the economy?

• increase taxes

• decrease taxes; decrease interest rates

• increase spending; increase interest rate

• decrease spending; decrease the money supply

Which monetary policy tool would be expansionary?

• decrease reserve requirement

• increase discount rate

• increase interest paid on reserves

• selling bonds via open market operations

Choose the tools that the government would use to increase economic activity. (SELECT MORE THAN ONE.)

• increase taxes

• decrease taxes

• increase spending

• decrease spending

• decrease money supply

President Trump is directly involved with which of the following?

• fiscal policy

• monetary policy

• setting the Central Bank interest rate

• none of the above

How are monetary policy and fiscal policy similar?

• They are both done by the President.

• They are both done by the Central Bank

• They are both used to keep the economy stable.

• None of the above.

In Canada, Monetary Policy is the responsibility of